Dellner Woodville Ltd v Blackham

JUDGE SEYMOUR: The claimant, Dellner Woodville Ltd, formerly employed the defendant, Mr John Blackham, as managing director. Mr Blackham resigned as managing director in May, I think, 2011, but he was invited and required to serve a period of notice on garden leave. So it was that, although he gave notice on 9 May last year, it was not until 9 August that his employment came to an end.

During the period of his employment as managing director, Mr Blackham had access to essentially all of the material belonging to the claimant which was relevant to its business, including material which was confidential. For the purposes of performing the tasks of his employments, so it appears, Mr Blackham was provided with a computer and he used the computer in conjunction with a USB device upon which was copied, it seems, all of the material which he was likely to require access to for the purposes of his employment and, according to him, also material which related to him in a private capacity.

It is common ground that after giving notice to terminate his employment, Mr Blackham copied onto his personal computer the material which had previously been on the USB device which I have mentioned. It appears from the witness statement of Mr Norfolk(?), who is a computer expert who has analysed the material which is said to have been included on the USB device, that that material amounts to 124,830 files and folders.

After Mr Blackham’s employment came to an end, it appears that it was decided on behalf of the claimant to investigate the use which had been made by him of the computer which had been provided to him during the period of his employment. The investigation revealed that there had been copying of a number of documents from that computer. The investigation was undertaken by a company called NSEC, which is a Swedish organisation as I understand it, the parent company of the claimant being a Swedish company. The report of the investigation was provided to the claimant, I think, sometime in November of last year.

At all events, following the receipt of the report which I have mentioned, the claimant in the person of Mr Daghall(?) who is, for the time being at any rate, the replacement of Mr Blackham as managing director of the claimant, instructed solicitors, Messrs Graham and Rosen, to write to Mr Blackham a letter on 22 December 2011, in which Mr Blackham was informed that it was the intention of the claimant to make an application to the court for injunctions as a result of the copying of the material which I have mentioned, in so far as that was understood at the point at which the letter was written. That is important because what was suspected at the time the letter was written, I think, was something less extensive than Mr Blackham has disclosed actually happened in a letter written by his solicitors, Fladgate LLP, on 6 January of this year, which he has verified as accurate as to its contents in a witness statement which was made on 12 January of this year.

The important features, I think, for present purposes are these. There is no dispute that Mr Blackham copied a lot of material which actually belongs to the claimant. There is no dispute that Mr Blackham should have returned that material to the claimant. It is said that that has now been done because the material which was downloaded onto Mr Blackham’s personal computer is said to have been copied on the device which I have mentioned which was examined by Mr Norfolk and in that way has been returned to the claimant.

The order which is sought on behalf of the claimant against the defendant, Mr Blackham, in some respects is not in dispute before me. It is accepted on behalf of Mr Blackham that it is appropriate that I should order, so far as presently material as follows:

“(3)

On or by 4.30pm on 17 January 2012, the respondent must deliver up to the applicant’s solicitors, Graham & Rosen, at the address given at the end of this order, any property of the claimant which is in his possession or under his control. (4) If any such property exists only in computer readable form, the respondent must cause any such document to be printed out and or copied onto an electronic storage medium and given to the applicant’s solicitors on or before 4.30pm on 17 January 2012. The said electronic storage medium must be accessible to and readable by the applicant. (5) Until trial or further order, whichever shall be the sooner, except with the prior consent in writing given by the applicant’s solicitors, the respondent must not destroy or tamper with or alter or delete or part with possession, power, custody or control of any listed item.”

(Quote unchecked)

I interpose that the expression “listed item” is defined as including:

“All documents the property of the applicant save that this paragraph shall not prevent the respondent from delivering up documents in accordance with paragraphs 3 and 4 above.”

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And then:

“(8)

Until trial or further order, whichever shall be the sooner, the respondent shall not (a) use confidential information for any purpose or (b) divulge or permit to be divulged, confidential information to any person without the prior written consent of the applicant. The restrictions in paragraph 8 shall not apply to confidential information which the respondent can demonstrate he is lawfully requested to divulge by any regulatory body, court or government department.”

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What is in dispute before me is whether the order that I make should include two other paragraphs which are in these terms:

“(6)

On or by 4.30pm on 19 January 2012, the respondent shall provide a sworn affidavit (a) confirming that he has complied with the orders referred to in paragraphs 3 to 4 above, and if he has not so complied or any such property is, since 9 August 2011 i.e. the termination of his employment, no longer in his possession or control, stating where to the best of his knowledge any such property is, and giving the names and addresses of anyone to whom he has supplied such property; (b) giving full particulars so far as within his knowledge of the use or disclosure by him, other than in the proper course of his duties to the applicant when he was its employee, of any listed item; (c) giving full particulars so far as within his knowledge of all listed items that have been copied or adapted by the respondent otherwise than in the proper course of his duties to the applicant when he was its employee, and particulars as to the use to which such copies or adaptations have been put; (d) giving the name and address of everyone to whom he supplied or offered to supply any listed item, otherwise than in the proper course of his duties to the applicant when he was its employee.”

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And then:

“(7)

If the respondent contends that complying with any or all of the obligations set out in paragraph 6(b) to (d) above would be unduly onerous or difficult because of the amount of information he would thereby be required to divulge, he shall state as much in his affidavit and in respect of each such subparagraph, provide instead a summary of the most significant particulars requested, such summary being a minimum of two pages in respect of each subparagraph.”

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The substance of the provisions that I am being invited to include in an order which are in dispute, is that Mr Blackham should make an affidavit explaining what use he has made, if any, of what are described as “listed items”. I emphasise that the definition of the expression “listed items” in schedule B to the draft order before me is:

“(a)

All documents that are the property of the applicant, and (b) any document that contains information that been extracted or derived from such documents otherwise than by the respondent in the course of the legitimate performance of his duties as an employee of the applicant.”

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That definition is to be contrasted with the definition of the expression “confidential information”, which appears elsewhere in paragraphs of the order which I have already cited. That definition is this:

“Information derived or extracted from documents belonging to the applicant that is not in the public domain and which relates to the applicant’s manufacturing specifications and or plans, designs, research or development, the use or disclosure of which to a competitor would or would be likely to cause the applicant damage.”

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So it is immediately apparent that the paragraphs which are in dispute would, if I made an order in the terms that I am invited to make, require Mr Blackham to give some account of use which he had made of a document which actually belonged to the claimant but which related to information which was not confidential and was in the public domain.

The difficulty which I think arises in relation to the paragraphs which are in dispute, is whether it is appropriate in principle for the court to include in an order in a case of this type; provisions requiring the respondent potentially at any rate, to provide to the claimant, evidence of wrongdoing which the claimant has not itself already obtained. Certainly in the circumstances of the present case, notwithstanding that Mr Blackham gave notice on 9 May last year; notwithstanding that his employment came to an end on 9 August of last year; notwithstanding that, as is common ground, he entered after the termination of his employment by the claimant; into employment with a German company called Hübner(?), which is to an extent at any rate, a competitor of the claimant, there is no evidence before me that Mr Blackham has made any use whatsoever of any of the material, confidential or not, which he accepts he kept on his computer after the termination of his employment.

Mr Daniel Tatton-Brown, who appears on behalf of the claimant, together with Mr Alexander Robson, submits that it is appropriate in the circumstances of this case and, indeed, in the interests of Mr Blackham, that he should give an account of the use which he has made of the documents which he retained because, if as is possible he says he has made no use of them whatsoever, then that will be a material consideration in the determination of the future progress of this litigation. I have to say that I have considerable doubts about that submission. If Mr Blackham had deliberately copied documents belonging to the claimant with a view to misusing them for the benefit of his new employer, then to that extent at any rate, it would appear that Mr Blackham was capable of acting dishonestly by misusing the material that properly belonged to the claimant. If he were capable of acting dishonestly to that extent, there is no obvious reason why he would not be equally prepared to act dishonestly by swearing a false affidavit. I emphasis that I am not seeking to suggest that actually either of these possibilities is remotely likely. In the case of Mr Blackham, I am merely seeking to draw attention to the fact that there does seem to be a logical fallacy in the submission of Mr Tatton-Brown on this particular point.

Mackay J had to consider an application for relief similar to the sort of relief that I am being invited to grant but which is in dispute in this case, in the case of AON Ltd v JCT Reinsurance Brokers Limited [2009] EWHC 3448 (QB), but which has also been reported in the 2010 Industrial Relations Law Reports at page 600. Mackay J considered authorities relevant to the jurisdiction which he was being invited to exercise in a passage starting at paragraph 18 of his judgment. He began by saying:

“To say that applications such as this are fact sensitive is a trite proposition. The assistance therefore to be derived from decisions in other cases is limited except where clear statements of principle can be discerned.”

In my respectful submission, Mackay J was entirely right in expressing those views. Mackay J, having considered the authorities to which his attention was drawn, at paragraph 24 of his judgment said this:

“In conclusion, I do not doubt, and nor has it really been strenuously argued by the defendants, that there are no circumstances and there is no case in which disclosure of this general type can be ordered where it is appropriate to do so in the exercise of the court's discretion. The issue for me is whether the circumstances here are such that it is appropriate to make what is on any view an exceptional and not a routine order, one which should not be made as a matter of course where prohibitory injunctions of the type found elsewhere in this proposed order are to be found.”

That in my respectful judgment is a very wise and very important summary of the principles which need to be applied in considering an application of the type before me in so far as there is a dispute about it. It is, in particular, important to notice that the jurisdiction is an exceptional jurisdiction. It is not to be exercised as a matter of routine or as a matter of course. There have to be special circumstances in the particular case which justify the making of these exceptional orders.

What are the circumstances of the present case? Quite simply, there are no exceptional circumstances in my judgment which justify the making of the orders which are in dispute. I have already drawn attention to the difficulty, as it seems to me, in the submission of Mr Tatton-Brown that it would be in the interests of Mr Blackham to swear an affidavit.

Mackay J, in the circumstances of the case before him, which I emphasise, identified six considerations which he thought it appropriate for him to consider. Those considerations are considerations which are likely to arise, some or all of them, in other cases. They are not the only considerations which may arise. They are not the considerations which inevitably arise in all cases.

The starting point, as I say, is that this is an exceptional jurisdiction. What in truth I am being invited to do is to make an order which the claimant sub silentio hopes will, by the mouth of Mr Blackham, provide that evidence of his misuse of their documents which they do not at present have. That, in my judgment, is entirely inappropriate. It is not the basis upon which litigation in this country proceeds. It is for a claimant who wishes to make a claim against a defendant to identify both the facts upon which the claimant seeks to rely and the legal foundation for the relief which it is sought to obtain. It is not for the defendant, in the ordinary case, to assist the claimant to formulate the claimant’s case by providing evidence that the claimant has not otherwise discovered.

The period of delay in the present case between the giving of notice by Mr Blackham and the hearing before the court is striking. I have already recorded that notice was given by Mr Blackham on 9 May 2011. Today is 13 January 2012. Two-thirds of a year has gone by. If there were any serious likelihood of a foundation for the expressed fears of the claimant that Mr Blackham has misused material which belonged to the claimant, one would have expected evidence of that to have emerged by now. That is perhaps particularly so, given that Mr Blackham makes no attempt to conceal that his intention when he resigned was to go and work for Hübner. He has gone and worked for Hübner. Hübner is, to an extent, a competitor of the claimant.

The working hypothesis of the claimant seems to be that it was likely that Mr Blackham would misuse its information for the benefit of Hübner, and yet there is not a scrap of evidence to suggest that that is what has actually happened. Mr Tatton-Brown bravely sought to portray a scenario in which, rather than going to his new employers and saying in effect, “Look what I have. This is going to be of great use to you”, Mr Blackham would hold back and defer sharing the booty that he had obtained from the claimant with his new employers, until some months had passed, or possibly even supply enticing tit-bits on a drip-feed basis. This in my judgment is unrealistic.

For the reasons which I have given, it is not appropriate in the circumstances of this case for me to make any order in terms of paragraph 6 or paragraph 7 of the draft order before me, or any variation thereof such as Mr Tatton-Brown suggested during the course of his submissions. However it is common ground that I should make an order in terms including paragraphs 3, 4, 5 and 8 and that I do.